For nonprofit childcare providers, the overriding trend today istight state budgets and reduced revenues. 

One way providers are trying toadjust to this new reality has significant implications for theirinsurance programs: relying on volunteers to do the work that paidemployees used to do, says William Henry, executive director ofVolunteers Insurance Services Association Inc. (VIS), a part ofCIMA Cos. of Woodbridge, Va. VIS covers some 5,000 nonprofitsthrough partnerships with 240 agents and brokersnationwide. 

Driven in part by this trend of nonprofits turning more and moreto unpaid helping hands, VIS has created a “volunteer-liabilitypolicy” to cover the volunteers of nonprofit childcare centers as ashield for the organization's general-liability (GL)policy. 

If a nonprofit center does have a claim, “in all likelihood,they don't want to put their GL policy at risk,” Henry says.“Unless the organization itself is named in a lawsuit, ourvolunteer-liability policy will provide primary coverage to thevolunteer being charged with injury or property damage. It's a wayto separate the risk that volunteers represent.”

The policy also includes endorsements that most commercial GLpolicies for volunteers do not: travel between the volunteer's homeand place of assignment at $1.72 per volunteer per year; and sexualabuse and molestation cover with a $1 million limit and nodeductible. 

The Hanover Insurance Group in Worcester, Mass. also has createda special offering for policyholders with exposures that requireabuse and molestation cover and defensive-driving cover. Hanoveralso created certification programs to help human-services agencieseducate and train their workers and volunteers. 

For its part on the training and informational front, VIS tellsits producers to caution clients about the hazards of childcarethey may not be aware of, such as quick-moving children. In areport released this year, “Volunteer Accidents: What Happens, andHow to Prevent It,” Henry recalls a volunteer who fell and brokeher shoulder tripping over a child who was getting settled in onthe floor for story time. 

Henry says producers should ask their childcare clients: “Doesyour training program caution volunteers that they might need touse more care just walking around than they would need to use intheir own homes?”  

Business Savvy: Essential

Nationwide, private funding is replacing a certain percentage ofslashed public funding for nonprofits, says Jack Roche, Hanover'spresident of business insurance. This is bringing about an effortto raise the level of business expertise among the management ofchildcare agencies; larger nonprofit organizations are alreadybringing in leaders with a solid corporate, for-profit background,he says.

“Private-funding outcome metrics are a lot different,” Rochesays. “There's a different level of accountability and businesssophistication. It puts pressure on folks who don't have that levelof management.”

As a result of these changes, the insuranceindustry's role to simply provide a generic insurance product andinformation relevant to childcare exposures is no longer adequateto service the industry. What nonprofit clients want instead arecustomized risk-management solutions, which Hanover creates throughagency partnerships with segment specialists. 

“We have to understand the pressures that are coming to theorganizations and help them manage their business differently thanbefore. It's a real major shift,” Roche says. “If we can solve someof the regulation and funding pressures in an efficient manner, wecan help overall so they don't get overwhelmed,” he says.

“The changes we're seeing really are ultimately going to requirea different approach in serving this sector,” adds JoAnne Artesani,assistant vice president of human services for Hanover.

The changeover from being a “people first” nonprofit agency orprovider to a bottom-line-focused nonprofit organization under thenew economy is a “pivotal” moment in the human-services sector thatrequires extra efforts, Artesani says.